Actuary and trustee reports indicate the following changes i

Actuary and trustee reports indicate the following changes in the PBO and plan assets of Douglas-Roberts Industries during 2018 Prior service cost at an. 1, 2018, from plan amendment at the $12 million beginning of 2015 (amortization: $4 million per year) Net loss-AOCI at Jan.1, 2018 (previous losses exceeded previous gains) Average remaining service life of the active employee group Actuary\'s discount rate $92 million 10 years 1.42 3% points Skipped (s in millions) Plan Assets S 400 PBO Beginning of 2018 Service cost 600 Beginning of 2018 expected) (9) Cash contributions 50 Return on plan assets, 4% (6% 16.0 Interest cost, 3% Loss (gain) on PBO Less: Retiree benefits End of 2018 eBook 18.8 96 30 $482.0 (30) Less: Retiree benefits $629.0 End of 2818 Hint Required 1-a. Determine Douglas-Roberts\' pension expense for 2018 1.b, 2. to 4. Prepare the appropriate journal entries to record the pension expense, to record any 2018 gains and losses, to record the cash contribution to plan assets and to record retiree benefits. Print References Complete this question by entering your answers i n the tabs below Req 18 and 2 to 4 Req 1A Determine Douglas-Roberts\' pension expense for 2018. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions rounded to 1 decimal place (.e., 5,500,000 should be entered as 5.5).) Pension expense 0.0 Req 1A Req 1B and 2 to 4

Solution

Calculation of pension expense:

$

Service cost

$50

Interest cost

$18

Expected return on the plan asset (16 actual plus $8)

($24)

Amortization of prior service cost

$4

Amortization of net loss

$5.60

Pension expense

$53.6

Computation of net loss amortization:

Net loss - AOCI

$92

6% of $600 PBO (greater than $400 plan assets)

$36

Amount to be amortized

$56

Remaining service life

10 years

Amortization

$5.60

General description

Debit

credit

Pension expense

$53.6

Plan assets (expected return on plan assets)

$24

     Net assets - AOCI (current amortization)

$5.60

     Prior service cost

$4

     PBO ($50+$18)

$68

(To record pension expense)

Loss -OCI ($24-$16)

$8

    Plan assets

$8

PBO

$9

   Gain -OCI (from change in assumption regarding PBO)

$9

(To record gains and losses)

Plan assets

$96

    cash (contribution)

$96

(To record cash contribution)

PBO

$30

   Plan assets (retiree benefit Payments)

$30

(To record retiree benefits)

Calculation of pension expense:
	$
Service cost	$50
Interest cost	$18
Expected return on the plan asset (16 actual plus $8)	($24)
Amortization of prior service cost	$4
Amortization of net loss	$5.60
Pension expense	$53.6
Computation of net loss amortization:
Net loss - AOCI	$92
6% of $600 PBO (greater than $400 plan assets)	$36
Amount to be amortized	$56
Remaining service life	10 years
Amortization	$5.60